CA Inter P4 · Chapter 2 · Question 8 of 12
Under ABC analysis of inventory, the 'A' category generally consists of items that are:
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: D) Small in number but account for a large proportion of total value
Explanation
ABC analysis classifies inventory on the basis of value. 'A' items are relatively few in number (for example about 10% of items) but account for a large share (for example about 70%) of the total value, so they deserve the strictest control. 'C' items are numerous but of low total value.
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